The Financial Supervisory Service posted an e-brochure explaining improvements to the system ahead of the resumption of short selling on the 31st.
On the 13th, the FSS noted, "Objectively unverified complaints about short selling have been continuously raised, so we created an e-brochure in a question-and-answer format based on facts."
The FSS explained through the e-brochure that all corporations, including small-scale entities, must establish an internal control system and receive verification from securities firms before they can engage in short selling. It emphasized that a double and triple monitoring system is in operation.
In response to the suspicion, "If stocks are borrowed after placing a short selling order without borrowing, isn't it possible to be detected by the short selling central inspection system (NSDS)?" the FSS drew a line, stating, "The NSDS can analyze transaction histories sequentially, allowing for the detection of whether the balance exceeds for each selling transaction, so it can also catch instances where stocks are borrowed after short selling."
Regarding the possibility of manipulating transactions manually to evade monitoring, the FSS stated, "We can detect balance manipulation activities," and added, "Balance management is subject to double monitoring through checks and supervision by an independent department and the NSDS's demand for verification."
In response to the misunderstanding, "If a computerized system is not established, isn't there no effective sanction as fines will be imposed?" the FSS said, "In addition to fines, substantial penalty surcharges and even criminal penalties can be imposed in the event of a short selling without borrowing."